Find out what separates a family law business valuer from an accountant and what family lawyers really look for when engaging an independent business valuer when it comes to family law matters.
When a separating couple cannot agree on the value of a business, obtaining an independent business valuation can be an important first step on the path to settlement.
Family law business valuations assess the value of specified business interests at an appropriate valuation date, using suitable methodologies and the available financial and commercial evidence.
An independent business valuer is engaged to examine financial and commercial information which may include tax returns, P&L statements, balance sheets, budgets, registered IP details, employment contracts, shareholder loan accounts, related-party transactions and other relevant records in order to arrive at a well-supported opinion of value of the business.
But family lawyers aren't simply looking for someone who can put a value on a business.
They're looking for an independent expert who can deliver a credible, defensible valuation, manage the process efficiently and make an already difficult matter easier to resolve.
1. Relevant qualifications and specialist valuation experience
A qualified accountant isn't necessarily an experienced business valuer. Business valuation is a specialist discipline requiring a combination of financial expertise, commercial understanding and professional judgement.
When assessing potential valuers, look beyond general accounting credentials and consider:
This matters because no two businesses are alike. A professional services firm, a construction company and a technology business can have very different earnings profiles, asset bases, ownership structures and commercial risks.
2. Independence and objectivity
When parties have competing financial interests, an independent valuation provides an objective basis for understanding what a business is worth.
The valuer should have no conflicts of interest that could compromise their impartiality, and their conclusions should be guided by the available evidence rather than the preferred outcome of either party.
Look for a professional who:
An independent valuer isn't there to advocate for either party. Their role is to provide an impartial assessment that helps both sides better understand the value of the business interest in question.
3. The ability to manage complex financial information
Some family law business valuations can involve considerable volumes of financial documentation spanning several years and complicated financial arrangements.
Other times, financial information may be incomplete, inconsistent or disputed. A business may have unreconciled accounts, unusual related-party payments, complex remuneration arrangements or financial results that don't accurately reflect its underlying commercial performance.
In both cases, forensic accounting experience can be particularly valuable.
An experienced forensic accountant understands how to examine financial records beyond their surface presentation, investigate inconsistencies and identify transactions that may warrant further scrutiny.
This can include examining related-party dealings, shareholder loan accounts, unusual expenses, director remuneration and financial arrangements between associated entities.
Where information is incomplete, the valuer should also be able to distinguish between established facts, assumptions and unresolved matters, explaining how these limitations may affect their conclusions.
4. Responsiveness, communication and an understanding of what's at stake
Family law matters often involve financial uncertainty, competing priorities and considerable personal stress. Lawyers and their clients need a valuer who can manage the process efficiently, communicate clearly and treat sensitive circumstances with appropriate care.
Consider whether the valuer can:
A business valuation can have significant implications for a family law property settlement. Choosing a qualified and experienced professional is therefore an important decision.
At Azure Group, our large family law business valuations team is led by Kelly Morgan, an experienced forensic accountant and Managing Partner with more than 35 years' experience in public practice.
Kelly brings extensive experience in business valuations, forensic accounting, and joint expert work, supported by strong industry relationships and a practical understanding of the commercial factors that influence business value.
Her approach combines rigorous financial analysis, appropriate valuation methodologies and clear, well-supported reporting to provide independent and objective opinions of business value.
If you're seeking an experienced independent business valuer, we can help. Contact us to discuss an independent business valuation for your family law matter via email or phone us on (02) 9238 1188.
You can also tell us as much or as little you wish about your query via this form and our team will aim to get back to you within 24-48 hours.
This article is intended to provide general information only, and is not to be regarded as legal or financial advice. The content is based on current facts, circumstances, and assumptions, and its accuracy may be affected by changes in laws, regulations, or market conditions. Accordingly, neither Azure Group Pty Ltd nor any member or employee of Azure Group or associated entities, undertakes responsibility arising in any way whatsoever to any persons in respect of this alert or any error or omissions herein, arising through negligence or otherwise howsoever caused. Readers are advised to consult with qualified professionals for advice specific to their situation before taking any action.